Interpretive Summary: Honey bees are critical for almond pollination. Without bees to pollinate this crop, there would be no almonds. Many tree fruits also require bees for pollination, such as sweet cherries, apples, and pears. Unfortunately, colony collapse disorder, and other honey bee health problems, have lessened the availability of honey bees for pollination of these crops. We developed a simple economics model to explain why pollination costs for almonds and sweet cherries have risen so dramatically in the last several years. We then use this model to predict what might happen to pollination fees if an alternative pollinator is introduced. The blue orchard bee is another bee, different from the honey bee, that is an excellent pollinator of almonds and tree fruits. The Agricultural Research Service has dedicated many years to developing methods for managing this bee for agricultural use, and some commercial orchardists are beginning to try it. Our economic model predicts that if even only 5-10% of almond acres are pollinated by the blue orchard bee instead of the honey bee, pollination costs will drop significantly. Conversely, adding the use of blue orchard bees for pollination of sweet cherries will have only a small effect on pollination costs for this crop. Sweet cherries provide an opportunity for beekeepers (for both kinds of bees) to increase their bee populations. Furthermore, sweet cherry acreage in the Pacific Northwest is only a fraction of that for almonds in California, and so any price effects are magnified many fold in almonds. Our model explains changes in the price of pollination in these tree crops and provides a means for predicting future prices in face of future changes in crop acreage (demand) and the availability of different pollinators (supply).

Technical Abstract:
The economic theory of supply and demand can explain the recent drastic changes in the pollination prices for almonds and cherries, following large acreage increases for these crops and a concurrent drop in honey bee availability due to colony collapse disorder (CCD). We constructed a model which shows that as acreage (demand) increased, the pollination prices also increased. Similarly, as the availability of honey bee colonies (supply) decreased pollination fees rose. We then predicted the effect of replacing some of the acreage pollinated by honey bees with a new pollinator, the blue orchard bee. The availability of the alternative pollinator decreases demand for honey bees and causes pollination fees to decrease. However, the effect was greater in almonds than in cherries. The difference between the two crops is that almonds do not produce marketable honey and do not provide ideal conditions for honey bee colony growth, and thus have an opportunity cost associated with them for the honey beekeeper. Conversely, cherries provide an opportunity for honey beekeepers to improve the strength of their colonies during a critical time of year. Furthermore, almonds comprise about ten-times as many acres as cherries in the Pacific Northwestern region of the U.S., amplifying the effects. Our model explains changes in the price of pollination in these tree crops and provides a means for predicting future prices in face of future changes in crop acreage (demand) and the availability of different pollinators (supply).